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Peeps® in China Peeps® in China Erin Smutz, Stacy Reppond and Shatika Rembert Final Project Phase 1: Situation Analysis October 4, 2017 Peeps® 4P’s Analysis Product Core Actual Augmented ● Hunger satisfaction ● Sugar-covered ● Promise of quality marshmallow candy and satisfaction ● Sweet/sugar fix ● Unique shapes, ● Customer service ● Happiness colors, and flavors website and phone ● Sharing and number celebration ● Bright, fun packaging and logo Peeps® 4P’s Analysis Price Place Promotion ● $1–$3 in stores ● Direct Store Delivery ● Always in Season™ and online (4–12 ○ Supermarkets, and Express Your ® pieces) convenience stores, chain Peepsonality ● $24 online for drug stores, and general ● Social Media retail stores 24-count case ○ #VotePeeps (5 pieces per tray) ○ Easy to locate campaign for ● Peeps® & Company retail Groundhog Day stores ● TV advertising ● Online ● In-store sales ○ Peeps® candy store promotions (buy one, get one free) ○ Third-party retailers (Amazon) ● Annual Peepsfest® ● “Confectionery such as breakfast bars, candied fruits, fudge, Halvah, marshmallows, and toffee” (IBISWorld, 2017a, p. 2) U.S. Industry ○ Chocolate not included ● By 2020, $38.1 billion in sales Analysis ○ Revenue: $8.2 billion ○ Exports: $640.5 million Candy Production ● Declining sales ○ Health concerns ○ Heightened competition ● Considered moderately globalized ● Chocolate included in Chinese industry ● Expected growth: 5% by 2020 Global Market ○ Disposable income Industry Analysis ○ Interest in Western-style Chocolate & Candy Production sweets ● Revenue: $25 billion ● Most of the market demand met by domestic production facilities due to nature of product Global Market Competition Analysis Product Price Place Promotion Peanut candies, Themes for different product types Hsu Fu Chi marshmallow candies, $5–20 [in US$] Brick-and-mortar stores and event-centered branding. chocolate, cakes, jellies, depending on International (supermarkets and cookies, sachima, Ltd. (joint venture which website you hypermarkets). Depends on Nestlé’s power for cereal-based snacks, with Nestlé) purchase from. public relations/advertising. and wafers. Milk candies, Emphasizes its distinguishable Brick-and-mortar stores marshmallow candies, $5-25 [in US$] on packaging . Yake (China) (only supermarkets); chocolate, gum, mints, the company’s online (company’s Co., Ltd. vitamins, jellies, and More traditional (print) than digital website. website). toffee. advertising. Non-chocolate candies $5-40 [in US$] Brick-and-mortar stores Shanghai Guan (or sugar confections), Markets White Rabbit candy. depending on (supermarkets, general bee products, wheat Sheng Yuan retail stores); online products, seasonings, which website you Traditional and digital advertising. Food, Ltd. (company’s website). and wine. purchase from. Different ads for brands. Brick-and-mortar stores Perfetti Van Non-chocolate candies (supermarkets, Melle (or sugar confections), Uses brands as icons with $0.50– $5 [in US$] hypermarkets, general gum, and dental health distinguishable packaging. Confectionery retail stores); online products. (company’s website). China Co. Ltd. Traditional and digital advertising. Country Overview ● Large potential customer base despite stationary growth ● Less expensive distribution channels due to population density ● Incorporate Mandarin into advertising and package design ● More mature, affluent consumers over the next decade Country Overview ● Industrializing nation with growing middle class ● Product price point makes it marketable to lower- and middle-class households ● Growing urbanization rate will impact the market ● Wealthiest cities (by GDP): Shanghai and Beijing Country Overview ● Investigate specific temperature controls for product packaging and distribution ● Eastern China, including Shanghai and Beijing, is more ideal for mapping distribution channels Country Overview ● High import taxes and customs duty (food =10%) ● Majority of digital ad spending on mobile ● Strict regulations for traditional and digital advertising ● Many Western social networking sites (SNS) blocked by government Cultural Overview U.S. China Holidays Individualism Family Collectivism Gift-giving Low-context High-context Short-term Celebrity Color and number orientation influence significance Language based Visual and Long-term on phonetics performing arts orientation Pride in national Language based symbols on pictures SWOT Analysis: Peeps® Strengths Weaknesses ● Associated with holidays and family ● Lacks product versatility ● Low price ● Limited marketing approach (social media) ● Sold most places ● Language barrier/ translation issues ● Utility for arts and crafts ● High competition Opportunities Threats ● Growing demand for Westernized sweets ● High tariffs and import costs ● Shift toward confectionery products ● Strict media laws and regulations ● Potential to connect as cultural symbol ● Diverse climate requires temperature controls ● Gift-giving cultural aspect ● Competitor partnership with Nestlé Questions? References A to Z World Business (2017a). "China: Demographics." Retrieved from www.atozworldbusiness.com.ezproxy.tcu.edu/#mode=country&regionId=32&uri=country-content&nid=1.03&key=demographic-summary A to Z World Business (2017b). "China: Documents." Retrieved from www.atozworldbusiness.com.ezproxy.tcu.edu/#mode=country&regionId=32&uri=country-content&nid=61.03&key=country-im-documents A to Z World Business (2017c). "China: Duties and Taxes." Retrieved from www.atozworldbusiness.com.ezproxy.tcu.edu/#mode=country&regionId=32&uri=country-content&nid=61.04&key=country-im-duties A to Z World Business (2017d). "China: Economy and Trade." Retrieved from www.atozworldbusiness.com.ezproxy.tcu.edu/#mode=country&regionId=32&uri=country-content&nid=1.04&key=facts-economy A to Z World Business (2017e). "China: Geography." Retrieved from www.atozworldbusiness.com.ezproxy.tcu.edu/#mode=country&regionId=32&uri=country-content&nid=1.02&key=climate-geography Azhar, S., & Koltrowitz, S. (2011). Nestle buys 60 percent of Chinese candymaker for $1.7 billion. Reuters. Retrieved from https://www.reuters.com/article/us-hsufuchi-nestle/nestle-buys-60-percent-of-chinese-candymaker-for-1-7-billion-idUSTRE76A0ZX20110711 Canadean Ltd. (2016). Consumer and market insights: Confectionery in China. GlobalData. Retrieved from https://www.globaldata.com/store/report/cs3178mf--consumer-and-market-insights-confectionery-in-china/ China’s urbanization rate to hit 60 pct by 2018. (2013, December 26). Reuters. Retrieved from http://www.reuters.com/article/china-urbanization/chinas-urbanization-rate-to-hit-60-pct-by-2018-report-idUSL3N0K607G20131227 Dezan Shira & Associates (2016, October 17). China’s New Advertising Law: Key Considerations and Implications for Online Advertisers. China Business Review. Retrieved from https://www.chinabusinessreview.com/chinas-new-advertising-law-key-considerations-and-implications-for-online-advertisers/ Doland, A. (2015, April 29). China Just Overhauled its Advertising Law: Here’s What You Need to Know. Ad Age. Retrieved from http://adage.com/article/global-news/china-overhauled-advertising-law/298312/ Doland, A. (2017, May 16). 57% of China’s Ad Spend Will Go to the Internet This Year. Ad Age. Retrieved from http://adage.com/article/digital/57-china-s-ad-spending-internet-year/309046/ Duncan, E. (2017). Confectionery industry – Statistics & facts. Statista. Retrieved from https://www.statista.com/topics/2709/confectionery-industry/ References Global Road Warrior (2017). "China: Demographic Summary." Retrieved from www.globalroadwarrior.com.ezproxy.tcu.edu/#mode=country&regionId=32&uri=country-content&nid=1.03&key=demographic-summary Human Rights Watch (Organization). (2006). "Race to the bottom": Corporate Complicity in Chinese Internet Censorship. New York: Human Rights Watch. Retrieved from https://www.hrw.org/reports/2006/china0806/china0806web.pdf IBISWorld. (2016). Chocolate & candy production in China: Market research report. IBISWorld. Retrieved from https://www.ibisworld.com/industry-trends/international/china-market-research-reports/manufacturing/food/chocolate-candy-production.html IBISWorld. (2017a). Candy production in the US. IBISWorld. Retrieved from https://www.ibisworld.com/industry-trends/market-research-reports/manufacturing/food/candy-production.html IBISWorld. (2017b). Global candy and chocolate manufacturing. IBISWorld. Retrieved from https://www.ibisworld.com/industry-trends/global-industry-reports/manufacturing/candy-chocolate-manufacturing.html Just Born (2017). Brands You Love: Peeps [web page]. Retrieved from http://www.justborn.com/brands-you-love#peeps Liu, R. (2007). Shanghai Guan Sheng Yuan International Trade Co., Ltd. Made-in-China. Retrieved from http://www.made-in-china.com/showroom/gsytrade/ Mitchell, E.S. (2013, March 12). Peeps Takes Advantage of Crafting Craze With ‘Express Your Peepsonality’ Campaign. Adweek. Retrieved from http://www.adweek.com/digital/peeps-takes-advantage-of-crafting-craze-with-express-your-peepsonality-campaign/ Mobile Drives Digital Ad Spending in China. (2017, March 8). eMarketer. Retrieved from https://www.emarketer.com/Article/Mobile-Drives-Digital-Ad-Spending-China/1015367 Peeps (2017). About Peeps [web page]. Retrieved from https://www.marshmallowpeeps.com/ Peeps & Company (2017). Online Candy Store [web page]. Retrieved from https://www.peepsandcompany.com/ Perfetti Van Melle. (2017). Perfetti Van Melle Confectionery (China) Co. Ltd. Retrieved from www.perfettivanmelle.com.cn Pham, S., & Riley, C. (2017, March 17). Banned!
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